Can I name an unmarried partner on my life insurance policy?
[social_share]Unmarried partners can often have a worry about life insurance. There is a common perception about life insurance that it can only be paid to people who have a legal relationship with the insured person. This is a misapprehension.
When life insurance first became widely available, in seventeenth century London, there was a rule that a beneficiary of a life insurance policy had to be related. This was because there had been rumours of life insurance related murders when it first became a product, as people took out life insurance on unrelated people and killed them. This was a moral panic, but it did lead to a relationship rule and that was the source of the idea that only related people can benefit from life insurance.
Although the majority of life insurance that is written is written for relatives, it is actually quite common for a person to have life insurance for people who are not related. The beneficiaries can range from the estate of the insured person, or a lender, to a business partner or a trust.
Another type of non related person who can be a beneficiary of life insurance is an unmarried partner of a life insurance policy holder. There has been a general decline in marriage within Australia for years and this has meant that there are many householders who are either not married yet, or who have no intention of being married, but who have a settled and dependent relationship. It is highly likely that there are shared expenses that would be too high for one partner on their own to sustain. There may be children and there may also be one partner who is not able to earn nearly as much as the other partner.
A beneficiary can be named by the life insurance policy holder at any time, although there may be contractual terms. Life insurance can often be an issue when a relationship breaks down. It is often assumed that life insurance has to be kept to one beneficiary from the start to the end of the policy, and so the life insurance can sometimes be finished when there is still some value in the insurance. The life insurance can be changed, although it can some times be a condition of any relationship break down.
